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Commercial Corridors Revitalization Strategy: Final Report of the Commercial Corridors Task Force

47City of Fort Worth Planning Department

MAGNOLIA

THE VILLAGE

The Magnolia Village is centered on the intersection of Hemphill Street and Magnolia Avenue and

extends several blocks west on Magnolia and north to West Rosedale Street. The neighborhood supporting

the village is Fairmount Neighborhood Association. Fort Worth South, Inc. promotes business development

and investment in the area.

The village area is anchored by the Wells Fargo Bank, Quicksilver Resources, the Paris Coffee Shop,

and a mixed-use redevelopment by Daedalus Development that includes loft apartments over office and

retail space. This building serves as the home of the Fort Worth National Bank and is located at the

intersection of Magnolia and Hemphill. The Hemphill corridor also includes a mix of office, light indus-

try, older housing, schools and churches and underutilized retail sites. In many respects, the transforma-

tion of this village into a destination is underway, and the plan advances this progress, encouraging more

density, a stronger housing presence, and improved connections to surrounding neighborhoods.

URBAN DESIGN ELEMENTSAND PLAN• The Fort Worth South urban design guidelines

provide a framework for the design ofbuildings and public spaces within the village.

• Internally located parking garages enablehigher-intensity mixed-use development toreplace surface parking lots.

• Ground floor retail, with office or residentialon upper floors, promotes pedestrian activityalong the commercial streets of the village.

• Public parks and plazas, street trees andlandscaping, and other public space amenitiescreate a sense of place. Transit stops shouldalso be designed as attractive public spaces.


48 City of Fort Worth Planning Department

MAGNOLIA

INVESTMENT CHALLENGES• Significant concentrations of bars and boarding

houses in the area along Hemphill close to thevillage have resulted in increased crime rates,excessive noise, poor property maintenanceand a negative market perception. Activeneighborhood involvement has reduced thenumber of boarding houses in the HemphillCorridor; however, a reduction in the numberof stores selling alcohol and bars would requirelegislative reform at the State level.

• As is typical in many older commercialcorridors, much of the village’s zoning isinconsistent with prevailing market conditionsthat favor pedestrian-oriented urban environ-ments. With Council adoption of the Commer-cial Corridors Revitalization Strategy, theCity should utilize the a petition-basedrezoning process in order to allow andencourage redevelopment as depicted in thevillage plans. Fort Worth South is well intothe process of gathering signatures for therezoning petition.

• Higher insurance rates for residential andcommercial properties in the central city canbe a significant deterrent to revitalization.Higher rates increase the costs of development(and redevelopment), maintenance, andbusiness operations. Although illegal, thispractice is widespread in many of FortWorth’s corridors, including the area sur-rounding Magnolia Village. Neighborhoodadvocacy organizations should monitorinsurance rate practices and help address anyinequities. Another solution is participation bythe public sector, through low-interest loans orgrant money, to offset cost impacts.

• As with insurance rates, the underwritingcriteria of traditional lending sources often do

not favor central city locations. While largerbanks are subject to guidelines established incorporate offices often located elsewhere,local and regional banks can be encouraged toparticipate in a variety of programs that serveto improve the financing environment forcentral city projects. Through the CommercialCorridors Revitalization Strategy effort, theCity was able to engage many of these lendingsources in an exchange of ideas for overcom-ing barriers to financing. This dialogue shouldbe continued.

MARKETING OPPORTUNITIESshort-term long term1-5 years 5-10 years

HousingRental

Ownership (Mid/Hi-rise)

Senior

RetailNeighborhood-Serving

Destination/Entertainment

Specialty

OfficeClass A/B

Service/Boutique

Incubator Space

OtherHotel

Public

Transit Station

Parking

DEVELOPMENT STRATEGYThe Magnolia Village will offer destination

retail, office space, and housing within thehistoric “main street” environment of MagnoliaAvenue. Developers should expect interest inthis emerging live-work environment fromemployees working in the Medical District. Thevillage will be anchored by higher density infilldevelopment supported by structured parking, aswell as the adaptive reuse of historic buildings.

Revitalization of the area as an urban villageshould result in new jobs and increased privateinvestment. At build-out, this village is pro-jected to be a vibrant urban neighborhood in theheart of the Medical District that supports 312jobs and attracts $18.5 million of privateinvestment.



ECONOMIC ANALYSIS

Estimated Project ValueTotal Office/Retail Rentable SF 50,000

Rent/SF* $15.00

Total Residential Rentable SF 49,500

Rent/SF* $12.00

Gross Income $1,344,000

Occupancy 90%

Effective Gross Income $1,209,600

Operating Costs $199,000

Net Operating Income $1,010,600

Capitalization Rate 10%

Project Value – Office/Retail/Residential $10,106,000

Total Housing Units 50

Sales Price/Unit $180,000

Gross Revenue $9,000,000

Less Marketing Costs $630,000

Project Value – Ownership Housing $8,370,000

Total Project Value $18,476,000

Development Cost EstimateProperty Purchase (Acquisition/Demolition) $1,800,000

On-Site Improvements (Parking) $2,800,000

Building Construction Costs $14,000,000

Construction Contingency $1,400,000

Soft Costs (% of Hard Costs) $3,000,000

Total Project Cost $23,000,000

Total Project Value $18,476,000

Project Margin/”Gap” ($4,524,000)

* Rates based on triple net lease.

MAGNOLIA

Existing land use

Proposed land use



JOB CREATION AND ECONOMICIMPACT SUMMARY

short-term1-5 years

Permanent Employees 312

Annual Income Permanent Employment $18,729,000

Construction Employees 390

Annual Income Construction Employment $3,900,000

PUBLIC INVESTMENT LEVERAGESUMMARY

short-term1-5 years

Development SF 174,500

Project Value $18,500,000

Project Cost $23,000,000

Margin/”Gap” ($4,500,000)

Public Investment Required $4,500,000

Private Investment Leveraged $18,500,000

Private/Public Investment Ration 4.1

PUBLIC INVESTMENT ESTIMATEFunding/Time Period

Investment Required: 0-2 Years 3-5 Years

Streetscape Improvements* $1,200,000 $400,000

Utility Improvements $50,000 $50,000

Street/Access Improvements $0 $0

Parks/Open Space $260,000 $0* Include pedestrian enhancements (e.g., specialpaving, lighting, etc.)

PRIVATE DEVELOPMENT PROGRAMCATALYST PROJECT

short-term1 - 5 years

Housing

Rental 55 units

Mixed-Use (Housing/Retail) 50/10,000 sq. ft.

Mixed-Use (Office/Retail) 30,000/10,000 sq. ft.

Parking Structure 280 spaces

MAGNOLIA



COMMERCIAL CORRIDORS REINVESTMENT STRATEGIES

MAGNOLIA Key word presented in bold for reference to glossary.

Regulatory Financial Market Physical

Source: Leland Consulting Group, HNTB & Interstar

Note: Village-specific strategies are to be used in combination with the standard strategies.

Near Term (2)Initiate education process to clarify theprocess for designation and implications ofestablishment of public improvementdistrict(s) in priority areas (2)

Long Term (3)Retain the services of a code violationmonitoring entity to track performance ofestablishments with liquor licenses;develop an Intergovernmental Agreement(IGA) with County placing a cap on thenumber of liquor licenses issued forbusinesses with revenues from alcoholsales above a certain threshold (3)

Immediate (1)Participate in disseminating housingdemand information and participate infocus groups and studies designed toascertain demand for specific housingproducts in the central city (1)

Near Term (2)Tax Increment Financing (TIF) District toassist with funding capital projects in thevillage establish a dedication of TIF incomeresulting from future investment, thus taxincreases, to the project; a reimbursementof funds to the project that the propertyowner can borrow against) (2)

Establish a task force, with lender andinsurance company representation, todiscuss rate differentials (lending andinsurance redlining) and provide publicsupport to off set impacts on operatingcashflow (2)

Near Term (2)Adjust level-of-service on roads toencourage pedestrian environment andbalance the level-of-service for cars usingmechanisms including: median placement,placement of traffic lights and their timing,posted speeds, etc.) (2)



MAGNOLIA

Current Project Public Funding SecuredMagnolia Green, mixed-use $ 1.0 million EDI

1.2 million CMAQ/STP-MMLand Use/TransportationJoint Venture Grant

$ 2.2 million

Neighborhoods

FairmountFort Worth SouthMistletoe Heights

Suggested NEZ

Population 5,920Land Area 1.68 Sq. MilesPercent in Central City 97%Percent CDBG Eligible 97%

Suggested NEZ Boundary

Suggested Urban Village Boundary

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